GREAT DEPRESSION

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GREAT DEPRESSION

• A severe economic decline that lasted 1929-WWII,
  causing millions of Americans to lose jobs, farms
  and homes

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EOC STANDARDS

• e. Identify and explain the economic factors that
  contributed to the stock market crash of 1929 and
  the Great Depression
• f. Explain the economic, environmental, and
  social impact of the Great Depression on American
  society
• g. Evaluate the impact of the New Deal on various
  elements of American society (e.g., social,
  political)
• CORE CONTENT
• SS-HS-5.1.1Students will use a variety of tools
  (e.g., primary and secondary sources, data,
  artifacts) to analyze perceptions and
  perspectives (e.g., gender, race, region, ethnic
  group, nationality, age, economic status,
  religion, politics, geographic factors) of people
  and historical events in the modern world (1500
  A.D. to present) and United States History
  (Reconstruction to present). DOK 3
• SS-HS-5.1.2Students will analyze how history is a
  series of connected events shaped by multiple
  cause and effect relationships, tying past to
  present. DOK 3
• SS-HS-5.2.5Students will evaluate how the Great
  Depression, New Deal policies and World War II
  transformed America socially and politically at
  home (e.g., stock market crash, relief, recovery,
  reform initiatives, increased role of government
  in business, influx of women into workforce,
  rationing) and reshaped its role in world affairs
  (e.g., emergence of the U.S. as economic and
  political superpower). DOK 3

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Causes of the Great Depression
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Myths and Misconceptions

• Many people believe that the crash of the stock
  market was the cause of the Depression. Not so,
  it was only a symptom.
• Many people also believe that Herbert Hoovers
  laissez-fair economic philosophy prevented the
  federal government from taking steps to prevent
  the crisis. Hoover was proactive in trying to
  ease the impact of the depression, it was too
  little, too late.
• Many people think that the Great Depression was
  the only major economic crisis in U.S. history.
  Nope, but it was the worst.
• Many people do not realize that the Depression
  was global and affected almost every capitalist
  economy on earth
• Some believe that FDR and the New Deal ended the
  Depression. Wrong again, WWII ended he Depression

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ECONOMY of late 1920sOPTIMISTIC ATTITUDE

• President Hoover 1928
• Economy great
• Everybody ought to be Rich mentality
• Increase income by
• investments
• Stock market high

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DEPRESSION FORESHADOWED

• Rising unemployment
• Declining of the Farming industry
• Stock prices dropping
• Buying on Credit (did not have money)
• Too many goods, Too little demand
• Unequal distribution of wealth
• 71 families earned less 2500

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STOCKMARKET 101

• STOCK is partial ownership in a company
• If others want to buy stock it increases. If
  others do not it decreases
• BUY LOW SELL HIGH
• Once you sell you receive money- until then just
  a sheet of paper

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BUYING ON MARGIN

• (To encourage less wealthy people to play stock
  market)
• Investors bought stocks for a fraction of its
  price
• Stock - 100.00 you paid 10.00 and borrowed the
  rest

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CRASH

• Black Thursday October 24, 1929 Investors began
  selling forcing stock prices to fall

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SELL SELL SELL !!!

• BLACK TUESDAY 10/29/29
• 16.4 million shares were sold GREAT CRASH
• Losses over 30 billion dollars
• This is the beginning of the Great Depression!

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THE CRASH AFFECTS MILLIONS

• Factories closed
• Farm prices fell
• Banks closed
• Europeans could not afford American made goods
  started a downward cycle world wide

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US Industrial Production
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US Stock Market 1928-1932
US Bureau of Labor Statistics
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CAUSES FOR THE GREAT DEPRESSION

• 1. Overproduction of goods
• 2. Widening of Wealth Gap
• 3. Stock and Real estate speculation
• 4. unregulated banking practices
• 5. Declining of farming industry
• 6. High Tariffs
• Hawley Smoot Tariff Act 1930

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Many did not realize how severe the downturn was
until 1932, when the economy had technically hit
bottom.
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Brother Can You Spare a Dime? Once I built a
railroad, I made it run I made it race against
time Once I built a railroad, now it's done
Brother, can you spare a dime? Once I built a
tower, up to the sun Bricks and mortar and lime
Once I built a tower, now it's done Brother,
can you spare a dime?
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RESPONSE TO ECONOMIC COLLASPE

• Hoovers response
• Cautious approach limited govt intervention
• Unemployment increased
• Hoovervilles sprung up- (shantytowns made up of
  scraps in cities for the homeless)

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Hoovers Political Decisions

• Hoover promoted volunteerism. Cooperation between
  government and business instead of coercive
  policies.

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• 1932- Hoover created RFC (reconstruction Finance
  Corporation)
• Agency issued govt loans to banks, rrs,
  businesses, etc.
• Believed TRICKLE DOWN theory-

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• The sole function of the government is to
  bring about a condition of affairs favorable to
  the beneficial development of private
  enterprise. Herbert Hoover (1930)
• The Fed will stand by as the market works
  itself out Liquidate labor, liquidate stocks,
  liquidate real estate values will be adjusted,
  and enterprising people will pick up the wreck
  from less-competent people."
• Andrew Mellon (1930)

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The Dust Bowl

• Between 1929 and 1932, about 400,000 farms were
  lost to foreclosure
• Not only economic damages, but environmental
• Land was overworked
• Drought and dust storms in the Midwest for much
  of the 1930s
• Black Sunday worst dust storm April 14,
  1935
• Dust would get into everythingkitchens,
  bedrooms, hair, nails, mouths
• Wrapped faces in damp rags to filter out the grit
• Nostrils with Vaseline to keep noses from
  clogging and bleeding
• dust pneumonia
• Many packed up families and headed west to
  California along Route 66

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Click below for a video!
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Bonus Army of 1932

• Veterans marched on Washington DC to demand their
  bonus from services during WWI
• Hoover sent Douglas MacArthur in to remove the
  veterans who would not leave using tear gas and
  bayonets

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African Americans

• Higher unemployment rates and they received the
  lowest pay
• Faced increased racial violence from whites
  competing for jobs
• 1933 24 African Americans died by lynching

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Next. The FDR Mystique
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ELECTION OF 1932

• FDR (DEM)
• Promised jobs
• He used his Brain Trust of trusted aides to
  help write speeches, etc.
• Used the radio

• HOOVER (REP)
• Prosperity is Just Around the Corner
• Seen as a do nothing president

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NEW DEAL

• His first Hundred Days were filled with
  legislation, over 15 pieces of major legislation
• Expanded the role of the federal government
• 1st job was to restore public confidence in banks
• March 6-10 Nationwide Bank Holiday
• Closed all banks to prevent withdrawals
• Passed the Emergency Banking Relief Act to
  inspect the countrys banks
• Banks that couldnt pay debts remained closed,
  restored confidence

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FDIC

• FEDERAL DEPOSIT INSURANCE CORPORTATION
• To insure individuals savings and deposits.

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3 Rs Relief, Recovery, and Reform

• Relief short range goals
• Recovery long range goals
• Reform deal with current abuses

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Emergency Banking Relief Act of 1933

• Power to regulate the banking system
• Close and reopen banks
• Safer to keep money in a reopened bank than in
  the back yard!

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Fireside Chats

• Roosevelt used the radio to talk to Americans
• Focused on Priming the Pump
• Click picture for his first fireside chat during
  the bank holiday

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Federal Emergency Relief Administration (May 1933)

• 500 million for states agencies for the poor

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Civilian Conservation Corps (CCC)

• Most popular of all the New Deal alphabet
  agencies
• Employment in fresh air government camps for
  about 3 million uniformed young men
• Reforestation, firefighting, flood control, swamp
  drainage
• Paid 30 a month, sent 25 home to their families

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• Agricultural Adjustment Act (AAA) help farmers
  meet mortgages, raised farm prices paid
  farmers to grow less
• Home Owners Loan Corporation (HOLC) to
  refinance mortgages on non-farm homes

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Civil Works Administration (CWA)

• Provided 4 million temporary jobs during cruel
  winter months
• Built 40,000 schools and half a million roads

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Tennessee Valley Authority (TVA)

• renovated five dams and constructed 20 new ones.
  
• Created jobs, provided flood control,
  hydroelectric power

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SEC Securities Exchange Commission

• Watchdog over stock market and protect investors.

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The Supreme Court

• Struck down two New Deal acts because federal
  government overstepped their roles (NIRA and AAA)
  
• FDR tried to pass a court-reform bill in 1937
  reorganizing the federal judiciary and appoint
  new justices
• Criticized it upset judicial independence and
  checks and balances
• Over next four years, FDR appointed 7 new
  justices from resignations

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Some people hated the New Deal

• Didnt go far enough to help the poor and reform
  the economic system
• FDR spent too much on direct relief and used New
  Deal to control business and socialize economy
• Huey LongShare-Our-Wealth promised Every Man a
  King
• Had 7.5 million members until he was assassinated
• Father Charles Coughlin Catholic priest who
  became anti Semitic
• Broadcasted on radio economic, political, and
  religious ideas

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Second Hundred Days (or Second New Deal)

• Spring 1935
• More relief for farmers and workers
• Eleanor Roosevelt travelled the country to remind
  her husband of the suffering
• 1936 election FDR wins overwhelmingly
• 1st time African Americans voted solidly
  Democratic and labor unions supported a candidate

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Works Progress Administration (WPA)

• 1935
• Employment on useful projects
• 11 billion spent to give jobs to over 8 million
  workers
• WKUs Cherry Hall was a recipient of the WPA
  money and workers
• Federal Art Project was also started

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Wagner Act

• 1935 (National labor relations board)
• Protected right of workers to join unions and
  collective bargain
• Prohibited unfair labor practices like
  threatening workers, firing union members, and
  interfering with union organizing
• 1938 Fair Labor Standards Act
• Set maximum hours at 44 and minimum wage at 0.25
• Set rules for 16 and under, and banned dangerous
  work for under 18

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Social Securities Act

• 1935
• Aged insurance for retirees 65 or older and
  their spouses
• Unemployment compensation system
• 15-18 a week
• Aid to families with dependent children and the
  disabled

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Rural Electrification Administration

• 1935
• Brought electricity to isolated areas
• In 1935, only 12.6 of American farms had
  electricity
• 48 in 1945, 90 in 1949

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New Roles for Women

• More women working outside of home
• Frances Perkins
• Secretary of labor First woman to head an
  executive department
• Helped create the Social Security system
• Mary McLeod Bethune
• Leader of the Black Cabinet and director of Negro
  Affairs in the National Youth Administration
• Advised FDR on racial issues and made provided
  job training and benefits to minority students

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1937 A Troubled Year

• Moving Forward
• Supreme court upheld many New Deal programs
• March 1937 upheld a Washington law that granted
  Minimum Wage
• Ruled both, a key part of the Wagner Act and
  Social Security constitutional.
• Farm Tenancy Act - 1937
• Gave tenant farmers and Sharecroppers a chance to
  buy land of their own
• Recovery in Doubt
• FDR scaled back federal deficit spending
• 1937 - A bad year for recovery. Massive drop
  in stocks and by the end of the year another 2
  million American unemployed.

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Impact of the New Deal

• Relief, Recovery, Reform
• Which area was the New Deal most successful?
• Changing relationships
• Changed the link between the American people and
  the Government
• New Role for Government meant a much larger
  Government.
• As a result many more people now looked to the
  Government for help

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End of the New Deal

• Weakened support 1937
• What happened in 1937 to cause loss of support?
• The 1938 Election
• Republicans and Southern Democrats gained seats
  in the House and the Senate
• Why did this happen?
• After the New Deal
• After 1938 FDR lacked the support to pass New
  Deal Styled programs.
• Problems in Europe now held the attention of the
  American Public.
• In 1939 and 1940 international conflict will
  ultimately do what FDRs programs could not.